Question
The Pennington Corporation issued a new series of bonds on January 1, 2010. The bonds were sold at par ($1,000); had a 9% coupon; and
The Pennington Corporation issued a new series of bonds on January 1, 2010. The bonds were sold at par ($1,000); had a 9% coupon; and mature in 15 years, on December 31, 2024. Coupon payments are made annually.
a. What was the YTM on January 1, 2010?
b. What was the price of the bonds on January 1, 2016 (6 years later), assuming that interest rates had fallen to 8%?
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Cases In Healthcare Finance
Authors: Louis Gapenski
5th Edition
1567936113, 978-1567936117
